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Prepared by and Scott
Writing under the nom de plume of J.L. LORD

Tuesday | October 27, 2020

Hello Friend.





YESTERDAY: October 26

SPX 3400.97 -64.42

The day started with a multitude of fears and concerns:

  1. Fear that a second wave was storming through the country.
  2. Some countries in Europe shutting down again, sparking fears of a global depression.
  3. More stalemate and zero budging by Nancy Pelosi on another stimulus round.
  4. More censorship by the big media outlets.
  5. China imposing tariffs on Boeing for being part of a defense contract that is selling missiles to Taiwan.
  6. Fears of possible tax increases and more regulation should Biden win the election.
  7. Housing numbers came in anemic. New home sales came in -3.5% when it was expected to be +0.1%.

This was an overwhelming amount of negative news to receive on one open over a weekend. While traders were trying to discern which of the above was most significant, no optimism leaked out about talks between Pelosi and Mnuchin. Traders began assuming that no stimulus would be done before the election, and perhaps not by the end of the year.

After the market opened with the SPX being down about -30, futures kept sinking all day. We hit the lows of the day about 12:30pm Chicago time before bouncing a little. One thing did stand out, and that was AAPL which has been a North Star for futures for the last few weeks. AAPL disconnected from the markets, or rather the other way around.

Despite the Dow closing down -650 and the SPX down -64 points, AAPL closed higher by 0.01 on the day.


TODAY – Hostage Situation – No predictions until day before election.

With a week until the elections, things are getting goofier every day. The last week of an election has a way of coincidences coming that can play havoc on a market. Then again, nothing may happen and loading up on puts will bleed your account in time decay.

I am still standing by my prediction (made December 31, 2019) that we will be positive for the year and making new all-time highs by the end of the year. I maintained this stance even when the SPX was down -36% for the year (this has been here since January 1).

S&P 500 Price Limits

From 8:30 a.m. to 2:25 p.m. CST, there are successive price limits corresponding to 7%, 13%, and 20% declines below the previous trading day’s reference price.

From 2:25 p.m. until the 3:00 p.m. CST close of the cash equity market, only the 20% price limit will be applicable.

Average year with lots of intermittent volatility
(+5.27% so far)

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Class tomorrow is going to be huge. It will be a recap of three strategies that will come into play the last week before the elections – including night minis, VIPAR spreads, etc.



Up and Running for POT students (so far).

Really quickly...

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P.O.T. Schedule



Trading is a tough job on a stomach void of coffee and humor.
You provide the coffee and we will take care of the rest.

Getting ready for second wave.



For education purposes ONLY. Please read the disclaimer below. We do not care if you agree or disagree with it—that is the rule. ​​​Stratagem Trading (Stratagem: “,” “Stratagem”), and any of its possible affiliates, respective independent contractors, employees, officers, or agents are not acting as licensed financial advisers, registered broker-dealers,tax advisers, etc. (although some individuals may or may not hold a license). Furthermore, they do not provide financial advice, make recommendations, or conduct business by transacting trades. Stratagem Trading adamantly states that nothing in this communication constitutes a solicitation, promotion, endorsement, offer or recommendation to buy or sell any investment, mutual fund, debt instrument, commodity, derivative product or security as described herein.

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